In this episode of Sequence Over Strategy, Michelle Warner dives into the hidden advantages behind success stories—things like timing, natural charisma, or a solid network—that often go unnoticed.
Ever feel like some business strategies work perfectly for others but never quite seem to hit the mark for you? In this episode of Sequence Over Strategy, Michelle Warner dives into the hidden advantages behind success stories—things like timing, natural charisma, or a solid network—that often go unnoticed. These “unfair advantages” can make it hard to see the full picture. Michelle helps you recognize these biases, ask the right questions, and make smarter decisions that actually work for your business. It’s time to take control of your strategy and set yourself up for success!
Check out the full episode at TheMichelleWarner.com
Hi, I'm Michelle Warner and I'm a business designer and strategist. And in the 15 years I've done this work, I've noticed the same trend everywhere. Business owners are falling into the trap of centering strategies first.
And what they need to be centering is sequence. Because the reality is the steps you take in your business and the order in which you take them is more important than how well you implement any single strategy. So on this show, my goal is to fix that by helping you find and trust your own sequence of actions rather than blindly following someone else's strategy.
Welcome to Sequence Over Strategy. In every episode of this show, I answer a real question from a real entrepreneur struggling with a real challenge in their business. And this week we're going to talk about a concept more than a question.
It's something that came up just this week in our Networking That Pays Q&A call. And while I've done several interviews on this concept in the past, it's not something that I've talked about recently. And given marketing conditions and some things I believe many of you are feeling because you tell me you're feeling them, it felt like time to bring it back and really break it down for you. What am I talking about?
I'm talking about a little thing we call survivorship bias. And if you are someone who has ever compared your results to someone else or wonder why something worked for one person and didn't work for you, or even if you've had promises made to you by people claiming to know how to help, maybe even selling you a solution, and then you find that it didn't even come close to working for you, this episode is for you.
And I want you to consider it a holiday season gift from me to you because I'm sharing this in the hope that it will do two things for you. Number one, I want to give you some peace about things that may not have gone your way in the past and probably were not your fault that they didn't go your way. And even more importantly, I want to give you some perspective about how to analyze opportunities or options that you have in the future so that the same thing doesn't happen to you again.
But before we kind of get into that perspective sharing and a little cheerleading portion of today's episode, let's get some definitions down.
When I say survivorship bias, I am talking about the particular cognitive bias. And by cognitive bias, I mean something that comes about when your brain attempts to simplify a set of information processing by using an incorrect filter. So I'm talking about the cognitive bias that occurs when we focus on individuals, groups, or cases that have passed some sort of selection process. So when we're looking to ask why something happened or why something worked, we're focusing on the individuals, groups, or cases that are not the total number of cases out there. Instead, we're only focusing on a subset that had passed some sort of selection process.
And we're overlooking the ones that did not. So other ways to say this is when we're looking at information, we're looking at a sample selection error, a little bit of a cognitive shortcut, but honestly, a fundamental misunderstanding of cause and effect. And we're really looking at a way of looking at data that ends up accessing only successful outcomes while disregarding failures. So what does this mean in very plain English?
In very plain English, survivorship bias means looking only at successful outcomes and assuming those are all outcomes, which obviously they are not. But very few situations in life come with all successful outcomes. And when we're only looking at successful outcomes and we're disregarding anything that was not a successful outcome, if we then try to reverse engineer how we got to that outcome and we apply that to everyone, we're missing a lot of lessons that are really important in terms of what may have happened in the cases that were not successful. And therefore, our conclusions on what's possible come with very rose-colored glasses because we only see those cases that show a very large bias for success and for survivorship.
And so then when you're presented maybe with an idea of a strategy of what you should do in your business or some sort of solution or some sort of idea or even some sort of business model and you only hear the successful outcomes, you are going to assume that that outcome is available to you as well. And maybe it is, but maybe it isn't because you're not looking at the full slate of outcomes so it makes it much more difficult to assess are you in alignment with being able to succeed with this strategy? What were some of the stories? What were some of the reasons why people who maybe didn't succeed? What were some of the reasons they didn't make it? And are there lessons in there for you to assess whether it's right for you or not? And that's why this matters in small business, right? We may not always sit around and talk about all the psychological cognitive biases that are out there even though I find them fascinating. But this one really, really matters especially if you're on the internet looking for information on how to build a business because let's point out the elephant in the room here. You are battered with advice all day long.
All day. And when there's more infrastructure around you like if you're in a really big business with a lot of colleagues and a lot of just infrastructure and bureaucracy around you it can be easier to ignore that advice. There are more areas, more checks basically on your ideas. But when you're a small business and you're fighting for survival every day or even if you're thriving but in a small team where you're always looking for an edge or always looking for a new idea all that advice that you encounter all day long, it matters. Whether it's in conversation, whether it's on a blog post whether it's a LinkedIn post, whether it's a podcast like this one wherever you are consuming information and consuming advice that stuff matters. And it comes from a lot of well-meaning folks but you still hear it even when you're trying not to and you take it in and you do your best to apply it and sometimes it works and then we cheer and we get excited but a lot of the time your results look like nothing like the results of the person or entity who shared that advice.
And this is kind of the cruelty of it because at that point what I see over and over and over again is that you immediately start blaming yourself. And I would love to say I'm kidding there but am I? Because most of the time it's not your fault that it didn't work. You didn't screw something up. You are not incapable of pulling this stuff off. It's just that, again, the full story wasn't provided so you didn't know how to assess should this be something that works for me or is it maybe not a fit. And by the way, I'm also going to stick up for the advice givers out there because a lot of times when we start talking about survivorship bias it can go negative pretty quickly and we want to criticize the advice givers, the course content providers, the leaders of Masterminds, the people putting content out on LinkedIn. We want to criticize them for maybe not sharing the whole story or not being truthful, and I put truthful in quotes. Because, yes, of course there are some bad actors.
Some people are operating in bad faith out there and trying to trick you. But in my experience that number is very, very small. Like tiny fractions of tiny fractions, numbers of people, are acting in bad faith. The vast, vast, vast majority of folks who are trying to help you are actually trying to help you and they're doing so in good faith. It may be that they're just missing a little piece of that story. And so even though they're operating in good faith it doesn't mean that the well-intended advice is going to work for you.
Now, there are some very obvious reasons for this and we've gotten better at seeing those over the last several years. And the first and most obvious is that the advice giver or the teacher or whoever you are listening to has benefited from some type of identifiable privilege. And here I'll categorize the typical types of cultural privilege that we can see. And here I'm thinking about gender, race, health, you know, or lack thereof, nationality, financial resources. Those are just some of those categories of identifiable privilege. And we have learned to identify those areas of privilege and we can look at a situation and see where survivorship bias may be in play.
We probably don't even call it survivorship bias because it's so obvious to us. And we can adjust our expectations accordingly because, let's be real here, the results that a white, American, cisgendered, single male with financial resources to burn is able to produce may not be available to a single mother who is a person of color. We know that and we can see that. Most of us are deeply frustrated by it and wish it was different and we take actions to make it different. But the point stands. We can see it, we can understand it, we can adjust expectations because of it.
And if we are in a position of not having that privilege, we can, again, we can see that and understand and kind of be able to adapt or understand what we should expect in the situation. And therefore, if our results are different, we can understand why, we can also understand whether this should be something that we should pursue or not. But there are other things that can cause similar privilege that might be more hidden and are more hidden and that we both can't see and, most importantly, don't even necessarily know what to look for because, as a group of small business owners, I have noticed that people aren't so great at identifying survivorship bias that isn't really obvious on the surface. And I'm talking about either side here, and this is where I'm talking about the well-meaning advice givers because even the well-meaning advice givers in these situations may not realize that they are benefiting from some of these more hidden survivorship bias metrics. And the advice receiver is very likely to not understand this. And so what we want to think about are these things that can cause similar privilege that might be more hidden, that we both can't see and, more importantly, don't even necessarily know to look for.
And these are the things in the business world we would call unfair competitive advantages. This is a business school term that you would hear a lot if you're getting your MBA. And that's just a fancy way of saying that, as a business, you are taking advantage of something, sometimes, many times, unknowingly, in ways that others can't match. And, again, these are more businessy things that aren't maybe as obvious culturally as the typical types, areas of privilege that we just talked about, but they can and do have just as much impact on your ability to have success. And here I'm talking about things like getting lucky with some market timing, maybe having some kind of media buzz. I talk about this often if you've heard me talk about how networking that pays came to be.
I had an unfair advantage in the first startup I was running in being able to generate some media buzz. And I talk about that and I disclose it all the time because I understand that. But sometimes you have a little bit of publicity or you have something happening and you don't really put two and two together and realize what an impact that's having on other strategies you may be deploying. You may stumble onto what I'd call an immature market or you may stumble into a mature market. Both of those can be unfair advantages. You may have some kind of personality trait that opens doors for you, right? You may be super extroverted. You may have a lot of charisma. You may be a natural connector. Some of those things you might know about yourself but you may not understand how much of an advantage that is. Having a network that's lined up for your business is a massive unfair advantage. This, by the way, is why networking that pays exists.
Given my last 20 years working in and around small business, I believe that a good network is one of the single biggest unfair advantages you can have. I also believe the success of your business is predicated on the quality of your network. The same way they say that your life is going to be lined up with the five people you spend the most time with, success of your business is going to be really tied to the quality of your network. While that can be a hidden advantage, it is something that I believe everybody can have if taught and presented correctly. That's exactly why I talk about it so incessantly. I don't have a huge desire to be a networking expert but I do have a huge desire to see businesses succeed. When I see that network, and I've seen it for 20 years of working with clients, when I see that network be such a huge competitive advantage, I want to bring that to the surface and make sure not only people know that but that it's an accessible thing that people can have. And so those are all examples of these unfair competitive advantages that are happening and that we're not seeing, again, either on the side of people producing content and teaching you how to do something and they had one of these hidden advantages working for them or on the side of you as the person listening to them and then wondering why it doesn't work for you.
Well, maybe it didn't work for you because you didn't have the same hidden advantage that they did. And that's survivorship bias. And we need to get better at spotting it because when you can spot it, again, you can just make and have better expectations on whether something will work for you in the same way you always do when you're probably looking at some of these more obvious areas of privilege. And so this is really the cruelty of survivorship bias.
Because it is this hidden selection error, it's particularly egregious because not only does it waste a lot of time for people who are trying things they should never be trying without the same advantages, but also then doubles down that failure by making you think that when it didn't work, there's something wrong with you or your business or your, you know, whatever. Insert the excuse that you make up. Somehow it becomes your fault. And so my invitation to you is that before you take someone's advice or before you take someone's system and that system or that advice is built on their personal experience, ask them what unfair advantages they had when they achieved the thing. Now, they may not immediately know what you're talking about because they may not have heard this episode. They may not be familiar with these terms.
I've spent this whole episode telling you how these are unfair advantages that are hidden. So they may not even know them. But now you can kind of explain what you mean and you can ask them, you can interview them in kind ways to identify what may have been at play. Not to challenge them or to make them feel bad, but so you can understand if you're setting yourself up for success or failure. And again, I try as an advice giver within the context of Networking That Pays or this show or anywhere where I am talking publicly, I try to very proactively do this because I understand survivorship bias. So you will hear me talking when I'm talking about Networking That Pays or when I'm giving examples of how this worked in my business, I am unpacking it and pointing out okay, I did have a hidden advantage here, but I've accounted for that, right?
In the material that I present to you, I have accounted for the fact that I had an unfair advantage and I don't expect you to have that exact same success I did using that exact same thing, but hey, we can go do this over here and that works without having an unfair advantage, right? I unpack my material because I understand these competitive advantages that I had. And I make sure that we A, bring those to the surface and B, are prepared to work around them.
And everyone else should be prepared in the same way or at least you should be prepared to be able to spot these things. When you hear a story now that is sparking some sort of oh my gosh, there's an unfair advantage, you want to think to yourself, how can I work around that, right? When someone announces that all the success that they are quoting to you happened in a year when you know that the market exploded.
In a weird way, a lot of things online exploded during the COVID years and did really, really well. And so if somebody is sharing a strategy that they built during 2020 when things were just skyrocketing, you might want to stop and ask, well, is that still true today? Because things have really leveled off.
That would be an example of unfair market timing or fair market timing, but some sort of competitive advantage in market timing, right? Because something that you happened to try in 2020 and worked, even if you weren't trying it because you looked at the market and said, oh, wow, things are really exploding because of COVID, even if you just happened to try it then and it worked, and you're out telling people to try that in 2024, well, those are not the same market conditions. So there was an unfair advantage there that you probably were not consciously taking advantage of because you were just doing your job and trying to create something in your business.
But if you're now sharing that information, you have to account for that advantage and understand how to unpack it and realize that a version of that strategy may still work, but the success that it had may look a lot differently. And so when you as the consumer are looking at this advice, you want to be asking those questions. Hey, if they are sharing a strategy with me that I should use and they're reverse engineering what they did, at what moment in time did they do that thing to achieve those results?
And what was happening around them at the time? What kind of market timing may have been there? What type of market were they encountering? Was it an excited market, right? Was it a market that was feeling a little scared? Was it a market that was seeing something for the very first time? Was it a beginner market? Was it an expert market? And how does that relate to their experience and what they were able to achieve?
Again, do they have some sort of personality trait that might not line up with yours? Are they able to connect really easily? Do they have a lot of charisma that led to a lot of natural connections that led to a really strong network that they don't even realize?
That's one thing I talk about in Networking That Pays. We have a lot of folks out there who are very naturally charismatic, very natural connectors, and so they may not see the network that they've built. They've done really legitimate work, but it may have not felt like work to them. And so the rest of us have to say, oh, gosh, I see that advantage. I see that they have a network because they had an unfair advantage in their personality allowed them to build this network really easily. How can I find the way to build a network even if I'm not naturally inclined to having very easy relationships?
And I raise my hand there. I am not naturally inclined to that, but I have figured out a way around that advantage because I think networking and having that network is so critically important. And that was one thing I saw very early days when I was in this market is I looked at people who are having very quick success and, again, natural networking, natural charisma, natural ability to connect with people, form partnerships, form collaborations.
That was behind every single one of them, and most of them didn't know it. And this comes back to where they're not like bad faith actors when they're giving you this advice. They just don't realize that they're doing that because it's a natural talent and we don't always understand our natural talents.
But then when people aren't able to replicate their results, there's frustration. So, again, you want to unpack that, and when I unpacked it, I saw, oh, gosh, we need to find a way for people who are not natural network builders to make that an accessible skill because it's such an important advantage. And that's what you want to do to unpack survivorship bias.
You're never going to have, you know, a flashing red light where things are going to be labeled survivorship bias, survivorship bias. You need to be able to look around you and by asking a few questions about how something happened, or just by observation, understand, hey, were there some hidden, you know, advantages here that these folks may have taken advantage of and maybe don't even realize? And how does that relate to whether this is going to work for me or not?
And, again, that's not challenging anyone. That's not telling anyone they're terrible people because they're not. These are people who are trying to help, but it's just making you a smarter consumer so that you are not sent down paths that maybe aren't going to work for you. And so your goal and my desire out of this and my cheerleading moment out of this episode is to let you know that survivorship bias is a thing and to have shared some of these examples with you so that you can look at them and start giving a critical eye to, hey, what were some maybe unfair advantages that were present here so that you can be a more empowered consumer, frankly, a more empowered advocate for your business when you're deciding your priorities?
Because when you should be looking to understand and when you can look and understand those advantages behind ideas, advice, systems that you are considering implementing in your business and you can unpack them, you're going to have a better chance of succeeding.
So to summarize what we've talked about today, we talked about this cognitive bias of survivorship bias, which is just the idea that a lot of times when stories are shared with us, especially success stories, obviously, we are hearing a sampling error. And what I mean by that is we are hearing the stories of the people who had success with something and we are not hearing about the failures. And that is very rarely done for nefarious reasons.
It's just a natural cognitive bias that we all have, but it does impact your ability to make great decisions for your business. And these tend to be relatively hidden things, right? So when I'm talking about survivorship bias, typically those areas of privilege that have become easier to see, those are definitely included in survivorship bias, but they're easier to see, right?
When we're talking about gender and marital status and where you're living and what your financial situation is and all those certain things, we can see that and we can understand how some people may have an easier path than others. But there's also a lot of stuff that we just talked about that you can't easily see. Again, you know, market timing, natural personality attributes, natural assets like a network, natural ability to get some media buzz, natural ability to just know some important people in a market before you enter it.
All of those things create what we call again in business is these unfair advantages and they matter and they matter a lot, but they're hard to see. So I want to bring them to the surface so that you can look for them a little bit easier and you can make some of those decisions when you are approaching new opportunities and new advice. When you are confronted with all this information that's out there, I just want you to be a more critical, more observant consumer because that's how you become a real advocate for your business and take a real leadership role is starting to look at some of these strategies with a critical eye first, right?
When we go back to sequence over strategy, that's going to be the first step all the time is having that conversation saying, oh, that's an interesting strategy. I wonder why it worked for them. It's as simple as asking that question and that will help you start to unpack some of these advantages when you just get curious about, I wonder why that worked for them?
And you might start seeing some interesting things at play that lead you to believe, yeah, this is something I should consider or you know what, there was a lot going on for them that maybe is not present for me and right now it's probably not going to make a lot of sense for me to pursue it. That's it. Those simple questions can really save you a lot of time and frustration down the road.
And that's why I wanted to do this episode to just bring to the surface again, this concept and empower you a little bit to be a better decision maker for your business. And with that, I'm going to thank you as always for being here today. If this episode helped you, please share it because I would love to help as many small business owners as I know be more empowered in their decision making.
And in the meantime, I will see you back here in two weeks and between now and then, you can always reach me at themichellewarner.com.